15 percent average annual revenue growth over the last three financial years

Revenues and earnings expected to be lower than forecast due to project delays

Sjølund A/S

Investment by
DBAG ECF FIRST NEW VINTAGE

€10.8MN

DBAG'S INTEREST

€4.5MN

MANAGEMENT BUYOUT

Shareholders:
DBAG ECF FIRST NEW VINTAGE

52.1%

EQUITY SHARE BELONGING TO DBAG

21.5%

other shareholders

47.9%

First invested

JANUARY 2018

REVENUES in DKKmn

228

2016/2017

206

2017/2018 (EXP.)

As of 30 September 2018

15

percent

average annual revenue growth expected in the market for offshore wind turbines over the next few years

Sjølund is active in several growth markets at the same time and is still not even close to fully exploiting the opportunities that are available to develop within these markets. Together with its long-standing customer relationships, we believe that this provides a promising basis for the company’s continued positive development – and, as a result, offers an investment in one of DBAG’s core sectors.

PROFILE

Sjølund is one of the largest providers in the niche market for complex bent aluminium and steel components. At its headquarters in the Danish town of Sjølund and a production site in China, around 110 employees manufacture components that account for only a small proportion of customers’ material costs, but are often complex and relevant from a security perspective nevertheless. These components are always produced to meet the specific requirements of the individual customer and are distributed across the globe – also via a third location in the US. Sjølund also advises its customers on adapting products to reflect the manufacturing process (design for manufacturing). This approach has allowed the company to establish stable customer relationships and a strong market position. It generates a good half of its total revenues from the wind power industry, mainly with components for the nacelles of wind turbines. In the rail industry, Sjølund supplies train manufacturers with structural profiles and components for external cladding, for example for the front of the railcar, the window frames or the boarding area.

POTENTIAL FOR DEVELOPMENT

Sjølund’s sales markets, some of which have a low cyclical exposure, are expected to show significant growth over the next few years. This development will be driven by megatrends such as the use of renewable energy, global population growth and increasing urbanisation. This should allow Sjølund to achieve further growth and expand internationally – both through organic development and through acquisitions. The aim is to expand the company’s business with existing customers in high-growth markets such as China and the US. In the future, the Chinese production site should also produce components for wind power plants. At the moment, Sjølund generates around 35 percent of its revenues with German customers. The company also plans to achieve strategic development by restructuring its sales activities to focus more on the highly profitable mechanical engineering sector.

FINANCIAL YEAR 2017/2018

Sjølund acquired a company just a few months after the start of the investment, with which the company took possession of a production site in Eastern Europe: CUTform, an Estonian specialist for the processing and manufacture of high-quality steel and aluminium components, was acquired in September 2018. Revenues and earnings at Sjølund are expected to be lower than originally forecast due to project delays in 2018.

OUTLOOK AND OBJECTIVES

In the coming months, the management team will push ahead with the strategic and operational measures agreed at the start of investment. Moreover, the focus will be on integrating the acquired company CUTform.

Responsible team member

Bernd Sexauer

Managing Director

Bernd Sexauer was initially with Deutsche Beteiligungs AG from 1991 to 2006 and became a Managing Director in 1998. Since his return in 2012, he has been strengthening the team at Deutsche Beteiligungs AG once more.

Prior to entering private equity practice, he earned a degree in Business Administration from Goethe University Frankfurt am Main. From 2006 to 2012 he was Managing Director at DZ Equity Partner and at Prolimity Capital Partners, and CEO of publicly listed Heliad Equity Partners.

Bernd Sexauer has more than 25 years of experience in the investment business and in corporate finance. As a member of supervisory boards, advisory councils and other governance bodies he has supported 'Mittelstand' companies in numerous transactions. He has a wealth of knowledge especially of the automotive supplier sector, which he was able to apply for the investment in Oechsler.